U.S. Consumers Less Optimistic After Tax Increase
WASHINGTON (AP) – An increase in Social Security taxes is leaving Americans with less take-home pay – and a more negative outlook for the U.S. economy.
The Conference Board said Tuesday that its index of consumer confidence dropped 8.1 points in January from December to 58.6. That’s the lowest reading in 14 months and the third straight decline.
Congress and the White House reached a deal in January to keep income taxes from rising on most Americans. But the agreement did not extend a temporary cut in Social Security taxes.
Ford Shares Down as 4Q Profit Eclipsed By Europe
DEARBORN, Mich. (AP) – Ford is posting record profits in North America, but it’s not enough to quell unease about the company’s prospects elsewhere.
Ford’s shares dropped nearly 5 percent Tuesday after the company said it expects to lose more money in Europe this year and break even in Asia and South America. The final straw for investors: Ford said sales will increase next year but profits should remain about the same, dashing hopes that margins will continue to grow.
The No. 2 U.S. automaker posted record pretax profit of $8.3 billion in North America in 2012, the result of a six-year turnaround orchestrated by CEO Alan Mulally. It’s reaching back into that playbook to fix its operations in Europe, where it lost $1.75 billion. The European restructuring plan announced in October was one reason Ford’s stock has been trading at levels not seen since 2011.
Fed Likely To Stick To Low-Rate Message This Week
WASHINGTON (AP) — When the Federal Reserve meets this week, it’s likely to affirm the message that it intends to help lift the economy, and consumers and businesses will be able to borrow cheaply well into the future — even after unemployment has dropped sharply.
Last month the Fed signaled for the first time that it will tie its policies to specific economic barometers. It said that as long as the inflation outlook is mild, it could keep short-term rates near zero until the unemployment rate dips below 6.5 percent from the current 7.8 percent.
That could take until the end of 2015, the Fed predicted last month.
Hostess Set to Announce Bidder for Twinkies
NEW YORK (AP) – The indestructible Twinkie appears to be one step closer to a comeback.
Hostess Brands is close to announcing that it has picked two investment firms — C. Dean Metropoulos & Co. and Apollo Global Management — as the lead bidders for its Twinkies and other snack cakes, according to a source close to the situation who was not authorized to comment publicly on the talks.
The joint “stalking horse” bid would set the floor for an auction process that lets competitors make better offers. A judge would have to approve any final sale.
Judge OKs $4 Billion BP Oil Spill Criminal Settlement
NEW ORLEANS (AP) – BP PLC closed the book on the Justice Department’s criminal probe of its role in the Deepwater Horizon disaster and Gulf oil spill on Tuesday, when a federal judge agreed to let the London-based oil giant plead guilty to manslaughter charges for the deaths of 11 rig workers and pay a record $4 billion in penalties.
What the plea deal doesn’t resolve, though, is the federal government’s civil claims against BP. The company could pay billions more for environmental damage from its 2010 spill.
The judge noted that the company already has racked up more than $24 billion in spill-related expenses and has estimated it will pay a total of $42 billion to fully resolve its liability for the disaster in the Gulf of Mexico.
Microsoft Retools Office For Touch Screen, Web Use
SAN FRANCISCO (AP) – Microsoft is selling a retooled version of its Office software to consumers as an online subscription service for the first time in an attempt to extend one of the company’s key franchises beyond personal computers.
Tuesday’s release comes six months after Microsoft previewed the new-look Office, which includes popular word processing, spreadsheets and email programs.
The revamped Office boasts touchscreen controls, just like the redesigned version of the Windows operating system that Microsoft Corp. released three months ago. The company, which is based in Redmond, Wash., is trying to ensure that its products retain their appeal at a time when people increasingly rely on smartphones and tablet computers instead of PCs.